WealthManagement Magazine

Prudential Nixes Investment Banking

Prudential Nixes Investment Banking Analysts will focus on investors, not issuers. Prudential Securities is eliminating its investment banking effort and realigning its research to support clients.Since the December announcement, some 160 investment bankers and support staff have been cut. The firm says analysts will concentrate coverage on S&P 500 stocks.The change will make Prudential Securities

Prudential Nixes Investment Banking Analysts will focus on investors, not issuers. Prudential Securities is eliminating its investment banking effort and realigning its research to support clients.

Since the December announcement, some 160 investment bankers and support staff have been cut. The firm says analysts will concentrate coverage on S&P 500 stocks.

The change will make Prudential Securities the first major firm "to use its research capability to primarily serve its individual and institutional investors rather than its investment bank," said John Strangfeld, CEO of Prudential Securities, in a statement.

"I think this makes the research analyst obviously more objective and unbiased," says one Prudential rep. "If there was any inherent bias before, it's certainly gone now."

But another broker at the firm is worried about analyst quality.

"The cream of the [analyst] crop is not going to be attracted to this firm because the potential revenue is limited" without an investment banking effort, the rep says.

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